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Progressive Review - Congress gives a boost to Perkins Loan, Pell Grant programs
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THE PROGRESSIVE REVIEW - December 24, 2015
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*-- Congress gives a boost to Perkins Loan, Pell Grant programs --*
WASHINGTON - Congress threw a lifeline Friday to two popular higher-education funding options -- the Perkins Loan and the Pell Grant -- after months of speculation about their fates.
Under the bipartisan spending legislation, the Perkins Loan Program was renewed with a two-year extension, giving a reprieve to hundreds of colleges that were at risk of having to return federal funding and thousands of students who may have been shut out of classrooms. At the same time, the maximum Pell Grant was boosted by $140, to $5,915. President Obama signed both into law Friday. Lawmakers said the measures are small steps to a bigger resolution.
"While I am concerned about some of the eligibility changes included in the compromise legislation, this is good news for hardworking young people in need of assistance to afford college," Democratic Sen. Jack Reed, of Rhode Island, said of the Perkins Loan. "Any future changes to student loan programs should be handled more responsibly so families don't face gaps in their ability to finance an education."
Passage of both programs is good news for students, albeit temporary. The crippling $1.2 trillion of outstanding student loan debt is looming large over the country as lawmakers continue to grapple with overhauling the Higher Education Act, sweeping legislation that oversees the federal student loan system and Pell Grants, among other things. Some lawmakers, headed by Sen. Lamar Alexander, R-Tenn., chairman of the Senate Health, Education, Labor and Pensions Committee, believe the student loan system, including Perkins, is too far-reaching and should be rolled into a single unsubsidized loan program.
Started in 1958, the Perkins program provides student loans at a set 5 percent interest rate, lower than most private loans. Each year, more than a half million students use the financial assistance at some 1,500 higher education institutions across the country. On Sept. 30, Congress let the program expire after Alexander objected to a one-year extension.
In the compromise bill, borrowers must now look to federal Stafford loans before turning to Perkins loans to finance higher education. It also eliminates eligibility for new graduate students in the 2016-2017 academic year.
"My goal in the Senate education committee is to find ways to simplify the complicated maze of federal grant and loan programs that are available to students, making it easier for them to apply for financial aid and afford college," Alexander said. "The agreement headed to the president's desk today will extend the Perkins Program for two years—while giving Congress time to reach consensus on the best way to achieve that important goal in the next Higher Education Act reauthorization."
The Pell Grant, which does not need to be repaid, awards federal dollars to students who show financial need and meet other criteria. The grant covers up education expenses, including books and classes. In July, the White House extended the program to some federal and state prison inmates taking college courses in a broader push to reduce national recidivism rates and overhaul the criminal justice system.
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